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Premier urges govt to pay back debts to private and small enterprises

Updated: Jan 31,2019 9:21 PM

Related departments must strive to clear migrant workers’ wage arrears before Spring Festival, and by the end of the year, government departments and large State-owned enterprises must strive to clear over half their debts, Premier Li Keqiang said at the State Council executive meeting on Jan 30.

Premier Li further said that the overdue debts of central enterprises to private enterprises must be cleared by the end of the year.

The meeting heard a report on debt payments to private enterprises and small and medium enterprises.

Government departments and large State-owned enterprises have paid back debts worth 160 billion yuan ($23.8 billion), and arrears of migrant workers’ wages and livelihood projects have been paid first, according to the meeting.

Noting the difficulty and cost of financing, Premier Li urged all local governments and departments to quicken the repayment of debts, and to make repayment plans.

Newly issued local government bonds should be used to pay back debts first, along with the interest saved through bonds of other financial instruments by local governments, the Premier said.

The Premier added that central enterprises must take the lead and pay back overdue debts to private enterprises and provide support to local State-owned enterprises.

Random inspections and auditing supervision must be increased, the Premier said, continuing that poorly performing local governments and departments will be publicized and dishonest individuals will be punished.

He also urged to establish a long-term mechanism for preventing arrears.

Governments are not allowed to ask enterprises to undertake contracted projects without payment, the minimum proportion of progress payment should be raised, and laws and regulations should be improved to prevent new defaults, he said.